Key Takeaways:
- Revenue Scale: Apple stock generated $416 billion LTM revenue, with Q4 sales of $102 billion confirming sustained global demand.
- Margin Strength: Operating margins reached 32%, reflecting high services mix and disciplined cost structure supporting durable profitability.
- Price Projection: Apple stock could reach $323 by 2028 based on 8% revenue growth, 33% margins, and a 29x earnings multiple.
- Return Profile: This implies 30% total upside from $248, translating to roughly 10% annualized returns over 3 years.
Apple (AAPL) designs consumer hardware and software ecosystems, generating $416 billion LTM revenue, reflecting unmatched global scale across devices and services.
This early January, Apple signed a multi-year AI deal with Google and announced China discounts up to 1,000 yuan.
Apple delivered $102 billion Q4 revenue with 8% growth, showing resilient device demand and expanding services contribution despite macro volatility.
Q4 net income reached $27 billion with operating margins near 32%, reflecting pricing discipline and a higher services mix.
With a roughly $3 trillion market cap and 8% growth expectations, Apple trades near 29x earnings, leaving valuation tension.
What the Model Says for AAPL Stock
We analyzed Apple stock using assumptions reflecting its device ecosystem scale, services profitability, and capital returns supporting steady earnings durability.
Based on 7.5% revenue growth, 32.7% operating margins, and a 29.3x exit multiple, the model projects Apple reaching $323.
That implies a 30.2% total return, or 10.3% annualized return, over 2.7 years to a $323 target.
Check whether Apple stock’s current price already discounts steady upgrade cycles and services growth using TIKR’s valuation tools for free →
Our Valuation Assumptions
TIKR’s Valuation Model lets you plug in your own assumptions for a company’s revenue growth, operating margins, and P/E multiple, and calculates the stock’s expected returns.
Here’s what we used for AAPL stock:
1. Revenue Growth: %7.5
Apple generated $416 billion LTM revenue, with 1-year growth of 6.4% and 5-year growth of 8.7%, showing stable expansion at massive scale.
Recent quarterly revenue reached $102 billion with 8% growth, supported by services expansion, device pricing discipline, and resilient upgrade cycles.
Forward growth faces limits from smartphone saturation and China pricing pressure, balanced by services penetration, payments, and ecosystem monetization.
According to consensus analyst estimates, 7.5% revenue growth reflects durable ecosystem demand balanced against Apple’s mature scale and hardware replacement cycles.
2. Operating Margins: 32.7%
Apple’s operating margins averaged 31.5% recently, well above its 5-year average of 24.1%, reflecting services mix and cost discipline.
Q4 operating margins reached roughly 32%, supported by higher-margin services revenue and stable gross margins across core hardware categories.
Margin risks include promotional activity in China and AI-related investments, while support comes from pricing power and recurring services revenue.
In line with analyst consensus projections, 32.7% operating margins balance recent strength with normalization below peak efficiency levels.
3. Exit P/E Multiple: 29.3x
Apple currently trades near 30x earnings, above its 10-year average of 22.7x, reflecting perceived earnings durability and capital return reliability.
Investor caution centers on growth saturation, while optimism stems from services margins, buybacks, and ecosystem stickiness supporting earnings stability.
Sustaining this multiple requires steady revenue growth, margin discipline, and continued capital returns without material earnings volatility.
Based on street consensus estimates, a 29.3x exit multiple reflects balanced expectations for premium quality without assuming further valuation expansion.
What Happens If Things Go Better or Worse?
Apple’s outcomes depend on device replacement cycles, services monetization, and execution discipline, setting up a range of possible paths through 2030.
- Low Case: If device demand stays muted and pricing pressure persists, revenue grows around 5.9% and margins hold near 27.0% → 4.9% annualized return.
- Mid Case: With stable upgrades and services scaling as expected, revenue grows near 6.6% and margins improve toward 28.8% → 9.8% annualized return.
- High Case: If services mix strengthens and hardware demand reaccelerates, revenue reaches about 7.2% and margins approach 30.2% → 14.4% annualized return.
The $385 mid-case target is achievable through execution on services and upgrades, without multiple expansion or narrative-driven optimism.
How Much Upside Does It Have From Here?
With TIKR’s new Valuation Model tool, you can estimate a stock’s potential share price in under a minute.
All it takes is three simple inputs:
- Revenue Growth
- Operating Margins
- Exit P/E multiple
If you’re not sure what to enter, TIKR automatically fills in each input using analysts’ consensus estimates, giving you a quick, reliable starting point.
From there, TIKR calculates the potential share price and total returns under Bull, Base, and Bear scenarios so you can quickly see whether a stock looks undervalued or overvalued.
See a stock’s true value in under 60 seconds (Free with TIKR) >>>
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
